A Functional Organizational Structure chart, a variation of the Hierarchical Model
This is the dominant mode of organization among large organizations. For example
Corporations, Governments, and organized religions are hierarchical organizations with different levels of
management, power or authority.
2) Matrix Structure
In a Matrix organizational structure, the reporting relationships are set up as a grid, or matrix, rather than
in the traditional hierarchy. It is a type of organizational management in which people with similar skills
are pooled for work assignments, resulting in more than one manager to report to (sometimes referred to
as solid line and dotted line reports, in reference to traditional business organization charts).
For example, all engineers may be in one engineering department and report to an engineering
manager. But these same engineers may be assigned to different projects and might be reporting to
those project managers as well. Therefore some engineers might have to work with multiple managers in
their job role.
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Matrix Organizational Structure
3) Horizontal/Flat Structure
This is an organizational chart type mostly adopted by small companies and start-ups in their early stage.
It‘s almost impossible to use this model for larger companies with many projects and employees.
The most important thing about this structure is that many levels of middle management are
eliminated. This enables employees to make decisions quickly and independently. Thus a well-trained
workforce can be more productive by directly getting involved in the decision-making process.
This works well for small companies because work and effort in a small company are relatively
transparent. This does not mean that employees don‘t have superiors and people to report. Just that
decision making power is shared and employees are held accountable for their decisions.
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Flat Organizational Structure
So in summary, when deciding on a suitable organizational chart, it is important to have an
understanding of the current organizational structure of your company.
4) Network Structure
Network organizational structure helps visualize both internal and external relationships between
managers and top-level management. They are not only less hierarchical but are also more
decentralized and more flexible than other structures.
The idea behind the network structure is based on social networks. Its structure relies on open
communication and reliable partners; both internal and external. The network structure is viewed as
agiler than other structures because it has few tires, more control and bottom flow of decision making.
Using a Network organizational structure is sometimes a disadvantage because of its complexity. The
below example of network org chart shows the rapid communication between entities.
Network Organizational Structure
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5) Divisional Structure
Within a divisional structure, each organizational function has its own division which corresponds to
either products or geographies. Each division contains the necessary resources and functions needed to
support the product line and geography.
Another form of divisional org chart structure is the multi-divisional structure. It‘s also known as M-form.
It‘s a legit structure in which one parent company owns several subsidiary companies, each of which
uses the parent company‘s brand and name.
The main advantage of the divisional structure is the independent operational flow, that failure of one
company does not threaten the existence of the others.
It‘s not perfect either. There can be operational inefficiencies from separating specialized functions.
Increase in accounting taxes can be seen as another disadvantage.
Divisional Organizational Structure
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6) Line Organizational Structure
Line organizational structure is one of the simplest types of organizational structures. Its authority flows
from top to bottom. Unlike other structures, specialized and supportive services do not take place in
these organizations.
The chain of command and each department head has control over their departments. The self-
contained department structure can be seen as its main characteristic. Independent decisions can be
taken by line officers because of its unified structure.
The main advantage of a line organizational structure can be identified as the effective communication
that brings stability to the organization.
Line organizational structure
7) Team-based Organizational Structure
Team-based organizational structures are made of teams working towards a common goal while working
on their individual tasks. They are less hierarchical and they have flexible structures that reinforce
problem-solving, decision-making and teamwork.
Team organization structures have changed the way many industries work. Globalization has allowed
people in all industries around the world to produce goods and services cooperatively. Especially,
manufacturing companies must work together with the suppliers around the globe while keeping the cost
to a minimum while producing high-quality products.
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